Beating a dead horse - How much to charge

[BulldogTom]

I just finished the most expensive tax return I have ever done.  I charge by form so I don't realize what the price is until I add the bill at the end.  Here is the return.  Tell me what you would charge.

1040, 2 W2's, 1 1099R for a non-taxable rollover, 2 1099INT, 1099DIV, 1099G for state refund, Schedule E Pg 1 for 5 Out of state rentals, 5 Depreciation schedules for the rentals, K-1 from an S-Corp (I prepare the S Corp return, Client's parents are majority shareholders), 2106 employee mileage, Sch. C, Office Use of home for Sch C and for 2106, 6198, 8582, 8959, CA 540 return, CA 540 Sch CA, CA 3801(Passive Loss Limitations), CA 3885 (Depreciation Differences for State), Out of State Non Resident return with supporting Schedules for the rentals.

To be fair, this is a dream client.  They had all the entry documents organized with a cover sheet and all of the expenses for each rental summarized on a spreadsheet with all the backup documentation.  The Depreciation Schedules have been set up for some time so no new asset entry.  The work was a breeze to do, once I got the S-Corp return done.  The client even sent me a new Income Statement after I discovered an error in the Sch. C.  It was the first year for the Schedule C so I reviewed it more carefully and it really was a minor error.

No...you can't have this client.

So, what would you charge for that return.  I did give them a $75 discount because I could not believe what my bill came out to.

Thanks

Tom
Newark, CA

 

[ILLMAS]

My price would probably  be at around $1200 to $1600 for both.

[taxxcpa]

I would charge him $50

 

[Richcpaman]

Bulldog:

 

Outside of the 5 out of state rentals, I have lots of these.

The form 6198 is the kicker.  I charge a lot of that form.  The fees from that one pays all the liability insurance....

I would be about $750 for that.  My ATX Forms invoice might come out to $2,100 for that.

Where did you end up?

Rich

[Yardley CPA]

I'd be closer to Rich...around $700.

[BulldogTom]

35 minutes ago, taxxcpa said:

I would charge him $50

 

Are you a 501 ( c ) 3 Charity? 

Tom
Newark, CA

[ETax847]

Wow, I thought my rates were low and I would be way above every price quote so far.

[Lee B]

I would probably charge $895 to $ 995

[FDNY]

Bulldog, I'm curious, how much time did you put into the personal return?    I have a couple similar returns with multiple out of states, they usually slow me down because each year it's like I'm doing them for the first time.  Well organized clients.  Usually billed around $600 (personal return only).  Their excellent bookkeeping helps me to finish the return with a minimum of follow up, so I get thru the return in half a day (4-5hrs) start to finish.  I do think I'm too cheap, but long time clients.

Although sometimes I would bill for how much my head hurts after I'm done, you know, that invisible tight band around your head feeling a little snugger than normal.

[Catherine]

My scientific wild guess is $650 to $800 - and that's assuming the five out of state rentals were at least in the same state.  If it's five different states, add $300.  But it could have been more.

[BulldogTom]

My original bill was $631.

Tom
Newark, CA

[Lion EA]

It's been a while since I've done a CA return with all those schedules.  I'd guess about $800 if only one non-resident state and really organized bookkeeping and no calls/emails/etc. asking if I'm done yet.  I think my forms-based invoice would come out closer to $1,000 and I'd give a Loyal Client Discount of $200, if I liked the client.

[Terry D EA]

Between 600 to 1000 here too.

[BulldogTom]

5 hours ago, FDNY said:

Bulldog, I'm curious, how much time did you put into the personal return?    I have a couple similar returns with multiple out of states, they usually slow me down because each year it's like I'm doing them for the first time.  Well organized clients.  Usually billed around $600 (personal return only).  Their excellent bookkeeping helps me to finish the return with a minimum of follow up, so I get thru the return in half a day (4-5hrs) start to finish.  I do think I'm too cheap, but long time clients.

Although sometimes I would bill for how much my head hurts after I'm done, you know, that invisible tight band around your head feeling a little snugger than normal.

I don't pay a lot of attention to the time I put in on a return.  That is why I charge by the form.  Life & tax prep are just averages. 

That being said, I think they dropped off their stuff about 3 weeks ago minus the Sch C info and the S-corp K-1.  I had some down time that afternoon and I did the data entry in about 1 hour or maybe a bit more.  I put the file away until I got the Sch C info last week.  About 20 minutes to enter.  Finished the S-corp on Sat and imported into the clients return.  Did about a 20 minute review (mostly on the 6198, 8582 & the NR return.  Spent about 45 minutes with the client reviewing the return and catching up with them.

What is that...about 2.5 hours including chit chat time in the office and tax planning for next year.

 

Tom
Newark, CA

[BHoffman]

I would have charged a minimum of $800 for 1120S including the state return. 

I would have charged a minimum of $850 for the 1040 and the state returns.

 

 

 

 

 

 

 

 

 

 

[Lion EA]

Oh, I missed the 1120-S, just saw the K-1 from an 1120-S.  (I really do need some sleep.)  My $800 or more was for the personal returns.  Another $750 minimum for an S-corp, which might come out to $850 or more in my system and then receive a discount for the multiple returns, again IF I like the client.  But, I usually discount heavily when I have multiple returns from organized tax payers, especially when I can export/import.

[BHoffman]

My PSYCHIC POWERS have activated!!!!   The dead horse SPEAKS!!!  "Chaaaaarge", he says.  "Charge as much as they will paaaaaay!!".  

He's fading....."If their AGI is into six figure.....chaaaaaarge.....chaaaaaarge......"

[Richcpaman]

That fee I quoted does not include the S-Corp.  Only the 1040.  Another $600-750 for the Scorp if it was straight.

Rich

[BHoffman]

You guys are seriously undercharging for 1120S.  I can whip one out in an hour if the info is good from the client.  But, it took me YEARS to be able to do that.  No Turbox program is out there for these returns.  No franchise tax company is going to charge less than $1200.  It's not like the competition costs less, and over time these returns are easy for us, but it was LONG HARD WORK for us to get to the point where it became easy.  

[Margaret CPA in OH]

10 minutes ago, BHoffman said:

You guys are seriously undercharging for 1120S.  I can whip one out in an hour if the info is good from the client.  But, it took me YEARS to be able to do that.  No Turbox program is out there for these returns.  No franchise tax company is going to charge less than $1200.  It's not like the competition costs less, and over time these returns are easy for us, but it was LONG HARD WORK for us to get to the point where it became easy.  

Great and profound thoughts.  I needed this for the partnership returns I'm doing now.  In my opinion, they are more challenging that the 1120 S returns I've done in the past.  No more Ms. Nice Woman!  Charge what I'm worth.  Client doesn't like, client goes elsewhere.

[BulldogTom]

There was no 1120S.  Client is a shareholder and gets a K-1, but I charge their mother for the S-Corp return. 

Tom
Newark, CA

[Richcpaman]

10 hours ago, BHoffman said:

You guys are seriously undercharging for 1120S.  I can whip one out in an hour if the info is good from the client.  But, it took me YEARS to be able to do that.  No Turbox program is out there for these returns.  No franchise tax company is going to charge less than $1200.  It's not like the competition costs less, and over time these returns are easy for us, but it was LONG HARD WORK for us to get to the point where it became easy.  

B:

That is different discussion...  And one we have had around here before. 

If you are getting you butt kicked with the hours you work and you are not making money, you need to raise your rates.

If your neighborhood, or your community only supports what we can charge, then that is an appropriate rate.

Mine go up some every year, and some years, I raise stuff across the board, and some get the PITA surcharge.  I have a lot less of those now.

I am good with where my rates are.

Rich

[BHoffman]

Hi Rich,  you are absolutely right that fees depend on many things.  I'm just saying that some mighty good tax preparers may not be giving themselves enough credit for their work and their knowledge and experience.  The OP seemed stunned at the fee he was thinking of charging.  I think it's very reasonable for the work described in the post. 

That said, I still think it's difficult to learn how to prepare business returns and fees should include the recoupment of all that previous time and effort we've spent.

[Roberts]

I charge per hour with a 1 hour minimum but the time it takes can be reflective on many issues (like what the previous preparer charged).

Charging by the form makes no sense to me since even a schedule C or E can be 5 minutes or 4 hours. I have clients who hand me a single Quickbooks print out and want a 1065 generated on a single rental property. It might be $200 normally but since they hand me 8 of them at one time, I charge $130 each and they take <30 minutes each.

I'd suspect I'm in the $675 range like Rich but I couldn't really tell.

Had a prospective client who had 30 rental properties and EVERYTHING was run through paper books. I told him $45 per property on his Schedule E and he about fell over dead. He found a EA who would do it for $600 and I about fell over dead.

 

 

 

 

[michaelmars]

I get $650-800 for inactive business returns.  that's my starting range.  I'm with B Hoffman, you are all too cheap. Of course your location and clients ability to pay will affect what you can charge.